Continuing high input costs, decreases in output prices and farm support and weather volatility all factored into new FBI (Farm Business Income) projections that the NFU said painted a “stark picture of the challenges facing many farmers”.
The data suggests general cropping enterprises (incomes down 58%) and mixed farms (-46%) also suffered a testing year.
There were small increases for those grazing livestock in the lowlands (+6%) and in upland less favoured areas (+2%), while specialist pig enterprises saw a 34% increase in incomes, albeit off the back of a torrid past few years.
£4bn budget needed
NFU President Tom Bradshaw said: “Across all sectors, farmers need to know that government is creating policies that support them to build financial resilience into their businesses.
“Profitable farm businesses are essential if we are to deliver what the country needs; food produced to world leading standards and environmental protection.
"We need government to deliver on its promises and prioritise domestic food production with a clear commitment to a budget that can underpin food production and deliver for the environment.”
He said independent modelling from the Andersons Centre, commissioned by the NFU, suggested an annual budget of £4 billion is needed to effectively support the delivery of the government’s statutory environmental ambitions, and a balanced agricultural policy.
“Profitable farm businesses are essential if we are to deliver what the country needs; food produced to world leading standards and environmental protection.”
NFU President Tom Bradshaw
“Under current support arrangements the sector will receive £720m of stability funding and maintaining this level of funding is vital to strengthen the resilience of a sector already facing significant economic challenges,” Tom added.
The provisional FBI findings follow a good year overall for average farm incomes in 2022/23.
However, the latest figures are not only low year-on-year, but low in comparison to recent years including the pre-Covid period. The projected 2023-24 returns for dairy are down 48% on 2016-19 averages, and 62% on 2018-23, while cereals income was 49% down on 2016-19 and 66% on 2018-23.
Lowland livestock and pigs were exceptions, but both have experienced difficult conditions in recent times which may overstate recent improvements.
The FBI figures follow initial results from the Defra Farm Business Survey.
The figures are only forecasts, with final results due later in the year.
Due to small sample sizes, there were no projections for poultry and horticulture.